Retail investors cannot directly invest in private credit funds—but other financial vehicles can offer exposure to the industry

Some private credit funds trade on the stock market

These funds, which trade at market prices, are called "public BDCs," which stands for "business development companies." For instance, the global alternative investment manager Ares Management Corp. has a public BDC.

Private credit and private equity are both alternative assets

Like private equity fund managers, private credit managers typically raise funds directly from investors, lending to corporations. The borrowers can benefit from the lack of middlemen and resulting efficiency, and the lenders often yield comparatively higher returns.

Direct lending is the most common form of private credit

Other types include opportunistic credit, special-situations credit, mezzanine finance, venture debt, infrastructure debt, real estate debt, and more. All of these sources of capital technically create private transactions, so they can all call themselves private credit.

Retail investors are getting burned by long/short strategies

In the US, many retail investors lack the SEC-mandated status (a high enough net worth, income, and other factors) to directly invest in hedge funds. The regulator considers hedge funds too risky for the masses. Hedge fund-like strategies have emerged as a workaround, despite potential pitfalls.

Why private credit is attractive to both businesses and investors

While investors are attracted to the high rates, private credit is particularly attractive to mid-sized businesses that are too small for bank syndication and want faster, more flexible financing options.

Private credit grew from a $250B asset class in 2010 to around $1.5T in early 2024

That's partly due to the industry's rising interest rates that created more upside for investors. Interest rates have increased in recent years alongside the Federal Reserve's interest rate hikes beginning in 2022. Private credit loans typically stretch over multiple years (typically between five and seven years, although term lengths vary).

Retail investors can get exposure to commodities via various financial vehicles

While retail investors likely won't go out and purchase a bushel of commodity wheat to trade, they can get exposure to the commodities market via commodity ETFs sold on traditional stock exchanges like the NYSE and Nasdaq and other financial vehicles. There are benefits to adding commodities to a retail investor portfolio (such as a hedge against inflation and a typically low correlation with more traditional asset prices), experts caution that commodities are usually volatile investments.

Some semi-liquid private credit funds saw a surge in investor redemptions in early 2026

This raised red flags about the state of the private credit market at large. However, experts have cautioned that the idea that private credit is on the verge of collapse is overstated.

Some institutional investors are growing wary of private equity, as certain investments underperform traditional market indices

Private equity often attracts investors who can afford to tie up capital for long periods of time in exchange for higher returns than traditional investments. For many years, private equity at least tracked with the S&P 500 in terms of returns to investors, but in 2024 and 2025, it underperformed and posted declining returns.

Alternative investments can be sorted into seven major categories, according to some experts

These categories include real estate, private equity, private debt, hedge funds, collectibles, and more.

Learn how to build a retail investing toolkit

Retail investors may not have the same resources institutional players do, but thanks to the internet, they can access several free tools that provide a leg up. These tools do everything from recommending portfolio allocations to helping investors screen stocks.

Real estate investment trusts help give portfolios more exposure to real estate

Also known as a REIT, a real estate investment trust is a type of company that invests in a portfolio of real estate, such as apartment buildings or malls. Investors can buy shares of the REIT to participate in its portfolio’s gains and losses.

There are three main ways to start investing in the bond market

Invest in the boind market through a brokerage, mutual fund or ETF, or the US government. Each has different steps and terms to follow, from starting rates to opening specific accounts. Some bonds are relatively easy to purchase, but the process differs depending on the type of bond you want.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

The first private equity fund was launched in 1960

At the time, the industry—and the public's understanding of it—was rather limited, and few private equity firms existed until the 1980s. The first leveraged buyout is thought to have taken place in 1955.

Since the 1990s, banks have sold some of the credit risk of their accounts to external investors, known as SRTs, or synthetic risk transfers

This means if the account defaults, the outside investors assume most of the risk in return for some regular payments, freeing up the bank's ledger. It is a form of insurance used by banks to allow them to free up capital. In 2024, nearly $100B worth of SRT notes were sold.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

The first US ETF was launched in 1993

Exchange-traded funds are relatively new inventions, and they've grown significantly in popularity during their few decades of existence. They were first created as an alternative to mutual funds. A colorful visualization depicts the entire history of ETFs.

It's difficult for individual investors to purchase IPO shares

Although the process of going public means the general public can invest in a company, the initial investment period is different. Before individual investors get in on the action, investment bankers sell the shares to larger financial institutions who can afford the asking price and risk associated with an IPO.

Accredited investors are people or other entities allowed to participate in investments that aren’t registered with the SEC

The accreditation is meant to protect retail investors from potential losses. Financial professionals with Series 7, 65, or 82 licenses qualify, but so do individuals with over $1M in net worth.

Mutual funds are a type of shared investment strategy that pools money

Mutual funds can invest in stocks, bonds, or other types of securities. This method is a popular way for investors to diversify their portfolio with less risk, making it ideal for long-term financial goals (like retirement).

Nearly half of billionaires plan to increase exposure to direct private equity investments in 2026

In a global survey administered by the Union Bank of Switzerland (UBS), 49% of billionaires plan to continue investing in companies by providing direct access to capital. However, only 37% of billionaires plan to increase their investments in private equity funds.

The 'Two and Twenty' structure allows hedge funds and private equity firms to earn significant returns

With this structure, firms charge limited partners or "LPs" a 2% management fee for overseeing the fund (assets under management or AUM) and take 20% of the fund's overall profits (carried interest). Many private credit funds also operate under this structure.

Open-end and closed-end funds differ in how they create and distribute shares

Open-end funds are able to create new shares on a daily basis, while closed-end funds have a set number of shares. This impacts the way shares are traded on the open market, and the way they’re priced.

Venture capitalists were once bullish on DTC brands

While a physical store can only hold so many objects, online retailers without the limits of four walls that could sell their products direct-to-consumer could theoretically be great investments. But they didn’t always provide investors with expected returns.

How is credit reporting regulated in the US?

While the three main credit bureaus and the credit scoring companies aren't government entities, they are subject to certain US government regulations, such as the Fair Credit Reporting Act.

There are ETFs that track lawmakers' stock purchases

If you can’t get enough politics in your life, why not invest like a politician? Because members of Congress are required to disclose their stock purchases, you can do just that, and the NANC and KRUZ ETFs make it even easier. NANC, referencing Nancy Pelosi, holds a basket of stocks that Democratic politicians have purchased. KRUZ, referencing Ted Cruz, holds a basket of Republican-held stocks.

Venture capital is a form of funding provided to early-stage companies with high growth potential, typically in exchange for an equity (or ownership) stake

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

The American Society of Civil Engineers' infrastructure report card gave the US a C in 2025, its highest grade since the project launched in 1998.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

The idea for the Federal Reserve was conceived in secret in 1910—with bankers donning duck hunt gear for disguise while traveling to a remote country club on Georgia's Jekyll Island

Doctors differentiate between a phobia and fear by asking patients whether their fear interferes with their day-to-day activities.

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

In 2025, four executives from large tech companies were given positions in the US Army Reserves—including Palantir Chief Technology Officer Shyam Sankar, which reinforced Palantir's ties with the US military and its role as a leading defense partner.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

When a Paris department store hesitated to sell Estée Lauder's perfume, she 'accidentally' broke a bottle, causing the smell to spread throughout the store and shoppers to start asking to buy the scent.

Fast-casual restaurant Chili's is experiencing a resurgence, with its parent company recently reporting a nearly 32% increase in sales, thanks to passionate Gen Z fans on TikTok.

Astronauts have repaired genetic damage in space using CRISPR—a molecular tool that can make precise changes to DNA and is used in single-celled organisms to attack invasive viruses.

When you complete a CAPTCHA on a website to prove you are human, you may be unknowingly training algorithms for self-driving cars, whose systems require training data to help identify crosswalks, bicycles, and other outdoor objects.

Scientists have struggled to pin down Ebola's natural reservoir species for decades, but the available evidence suggests that it's very likely fruit and insect-eating bats found in Africa.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

All rainbows are 'raincircles' caused by water droplets separating white sunlight into a spectrum of colors, but Earth's surface blocks the bottom half of the circle from our line of sight.

Prince's sexually explicit 1984 track 'Darling Nikki' attracted the ire of the Parents Music Resource Center, an advocacy group that inspired the Parental Advisory sticker, even though the song ends with a Christian message.